Myanmar and Bangladesh plan to build a cross-border highway later this year to link western Myanmar's Rakhine state and Bangladesh's Chittagong province once an agreement on the move is formally signed, the local Myanmar Times reported Monday.

The two countries reached a memorandum of understanding in April 2004 to build the proposed 133-kilometer highway to link Buthidaung in the Rakhine state and Ramu in the Chittagong province to facilitate trade ties.

The road could also help boost regional cooperation by strengthening economic and trade relations in the South and South- East Asia, observers said.

The construction of the highway was stressed during a recent consultation meeting between the foreign ministries of the two countries at deputy minister level which took place in Yangon.

According to the Bangladesh side, it wanted to remove trade imbalance between the two countries, which was in favor of Myanmar.

Myanmar official figures show that the bilateral trade between Myanmar and Bangladesh in the fiscal year 2005-06, which ended in March, amounted to 60 million U.S. dollars, of which Myanmar's export to Bangladesh stood 55 million dollars.

The two countries are striving to increase their bilateral trade to 100 million dollars, according to the Myanmar Ministry of Commerce.

Myanmar and Bangladesh have been placing emphasis on maritime trade, signing in Yangon a technical protocol on coastal sea-borne trade between the two countries in July 2004.

As a follow-up, to help promote their bilateral trade, the two countries had also agreed to build a bridge across the Naaf River with the cost to be borne by the Bangladesh side, reports said.

Currently, Myanmar and Bangladesh are engaged more in border trade than normal trade, Bangladesh officials were quoted as saying.